Taxpayers group wants in on talks

Tuesday

Jul 2, 2013 at 12:01 AM

STOCKTON - A group of five residents not convinced that administrators at City Hall have the community's best interest at heart will ask the court to be part of Stockton's confidential bankruptcy mediation.

Scott Smith

STOCKTON - A group of five residents not convinced that administrators at City Hall have the community's best interest at heart will ask the court to be part of Stockton's confidential bankruptcy mediation.

City Manager Bob Deis on Monday said the city vowed to "vigorously oppose" the move mounted by a "fringe group" trying to usurp the role of the elected council members.

The Taxpayers Working Group seeks standing in bankruptcy court to represent residents and communicate to them the complexities of Chapter 9, said the group's attorney, Karol Denniston of Schiff Hardin LLP in San Francisco.

"The Working Group does not intend nor expect to be a disruptive force," Denniston said. "Appointment of an official taxpayer committee will ensure that taxpayers are well represented and able to fully participate."

She said the group, if granted committee status, will function similarly to a committee of retired city employees that spoke on behalf of the larger group.

Former Councilman Dale Fritchen and David Renison, president of the San Joaquin County Taxpayers Association, head up the Working Group, which first met June 5.

Others named in court filings are: Larry Solari, a shareholder at Croce & Company Accountancy Corporation; Robert French, president of Western Truck Stops; and financial consultant James DiSerio. Other remain unnamed.

For her part, Denniston drafted the legislation requiring a municipality undergo pre-bankruptcy called AB506. Stockton was the first and only California city do that before filing June 28, 2012.

The Working Group was drawn to action by Deis' recent presentation of a 3/4-cent sales tax proposal, which he said is key to Stockton's strategy for exiting bankruptcy and bolster police services.

The City Council is expected to vote July 9 on weather to put the measure on the ballot for a citywide vote at the year's end.

Yet, the Working Group contends that the public has too few specifics assuring residents the general, unrestricted tax will be spent on public safety as officials portray, Denniston said, citing a lack of transparency.

She noted that Deis and city administrators are members of the California Public Employees' Retirement System, which makes their impartiality in navigating the city's bankruptcy "difficult if not impossible."

Denniston would not say if the Working Group sought to draw CalPERS into the bankruptcy case. She said the shortage of information prevents the taxpayers from knowing what questions to start asking.

In addition to blocking the group, Deis said it is made up of political "has-beens and wannabes" represented by an attorney desperate for a piece of the municipal bankruptcy frenzy.

"This is, in my opinion, an attorney that has no background in Chapter 9 and has been seeking a client for some time," Deis said. "They found people that wish they were on the City Council, but are not."

In last year's election, Fritchen lost his City Council seat to Councilman Michael Tubbs, and Renison, in 2009, vied for a council appointment ultimately given to Councilman Elbert Holman.

"If one wants to be a policymaker, they have to be dually elected by citizens of this community," Deis said. "They've been unable to do that. This is a back door way of doing that."

Deis also dismissed the charge that he or other city administrators have a conflict of interest over their membership in CalPERS. The judge rebuffed that argument first made by Wall Street creditors, Deis said, and council members ultimately call the shots.